In the tech industry, Jack Dorsey has long been considered a contemporary Steve Jobs. He has significantly influenced the modern world through his creations, Twitter and Square Payments. Particularly noteworthy is Square’s early adoption of Bitcoin via its CashApp.
In 2019, CashApp began offering Bitcoin custody services, allowing account holders to purchase BTC with their credit cards. This move predated similar ones by large corporations like MicroStrategy, currently making waves on Wall Street. However, as of May, Square has been rebranded to Block, and its shares have taken a significant 20% dip.
Despite this setback, Dorsey has warned investors of potential turbulence in US consumer strength. While this isn’t great news for Block’s business model, it could potentially act as a catalyst for Bitcoin’s price surge to $1 million.
Following Block’s quarterly earnings report, Dorsey noted a significant change in consumer spending patterns. “Discretionary spending in areas like travel and media saw a more pronounced impact, while non-discretionary Cash App Card spending in areas like grocery and gas was more resilient,” he said. This consumer softness significantly contributed to Block’s less than expected forecast.
This decline in spending led to a slump in sales in Q1, marking the first shrinkage of the US economy in three years. If the trend continues for another quarter, it could officially classify as a recession. In response, the central bank might cut interest rates to stimulate business, a move anticipated by a CNBC survey due to the unstable economy.
These potential rate cuts could propel Bitcoin prices to the $1 million mark, as Dorsey has previously predicted. When the Fed cut rates in the 2007-08 financial crisis, Bitcoin was launched. During the low-interest-rate period that followed, BTC prices soared from fractions of a penny to $20,000 by December 2017. A similar scenario seems likely now, with Bitcoin’s price well above $100,000 despite the Fed’s consistent refusal to lower rates.
